SWITZERLAND Law and Practice Contributed by: Yves Klein and Antonia Mottironi, Monfrini Bitton Klein and Ardenter Law
Insolvency Freezing Orders In the case of foreign insolvency proceedings, recog - nition of the foreign insolvency decree (Articles 166ff of the Private International Law Act (PILA)) will be granted ex parte, without further inter partes hearings. Third parties concerned may, however, appeal against the recognition. The publication of the decision of recognition in the federal and cantonal gazettes puts on notice all debtors on Swiss territory of the bank - rupt debtor that they can no longer make payments to the latter under penalty of having to pay twice, and that the holders of the assets of the bankrupt, in any capacity whatsoever, are required to place them immediately at the disposal of the bankruptcy office. Subject to the extraordinary application of the princi - ple of transparency (see 3.2 Claims Against Ultimate Beneficial Owners ), assets of third parties cannot be frozen. Banking secrecy does not apply to the assets of the debtor. Advances for costs may be requested to secure the costs of the liquidation proceedings – mainly court and administrative costs. Security for damages can - not be ordered against the foreign liquidators or credi - tors, as the duty to manage the assets of the estate relies on the state (or the appointed ancillary insol - vency office holder). Criminal Freezing Orders Where criminal proceedings are instituted (see 2.5 Criminal Redress ), broad freezing of assets may be ordered by the public prosecutor in order to secure restitution to the plaintiffs, procedural costs, fines and penalties, forfeiture (Article 263, paragraph 1, lit - terae b-d, Swiss Code of Penal Procedure (SCPP)) and replacement claims (Article 71, paragraphs 1-2, SPC). These freezing orders can be drafted in a gener - ic form, without identification of specific Swiss assets. Banking secrecy does not apply. Security for damages cannot be ordered against the plaintiff who requires the issuance of criminal freezing orders. Where ordered under Article 263, paragraph 1, litterae b-d, SCPP, the criminal freeze takes precedence over any civil order obtained by plaintiffs. Where ordered under Article 71, paragraphs 1-2, SPC, the state has
no preferable rights over the assets otherwise seized by the plaintiffs.
2. Procedures and Trials 2.1 Disclosure of Defendants’ Assets Civil Proceedings
In civil proceedings, except in matters where the par - ties have a legal duty of mutual information on com - mon assets, such as heirs or spouses, a claimant has no means to obtain disclosure of the assets of the defendant. Contrary to World Freezing Orders issued ad personam, pre-trial civil attachment of assets are orders in rem on identified Swiss assets and can only be granted if the claimant demonstrates a likeli - hood that there exist assets in Switzerland. Outside of the assets identified in the attachment order, the defendant cannot be compelled to disclose its Swiss or worldwide assets. Assets held with Swiss banks cannot be disclosed before the end of the inter partes proceedings of attachment. Criminal Proceedings In criminal proceedings, holders of assets of the accused or of third parties have the duty to hand over items and assets that may be seized pursuant to Arti - cles 263, paragraph 1 and 265, paragraph 1, SCPP ( 1.7 Prevention of Defendants Dissipating or Secret- ing Assets ). If and only if they refuse to comply with the invitation of handing over, the public prosecutor will issue disclosure orders pursuant to Article 263, SCPP. The accused is not subject to the duty to hand over (Article 365, paragraph 2, SCPP) but may be subject to criminal disclosure orders and to searches, where they may request the sealing of items and assets pro - tected under Article 264, SCPP. Suspicion of deten - tion in bad faith is enough to obtain the disclosure of assets formally held by third parties. Subject to restrictions justified by legally protected interests such as privacy of third parties, banking secrecy does not apply.
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